The Role of Internal Audit on the Governance of Regulated Tier 4 Microfinance Institutions in Uganda

Monarch is happy to announce the recent authorized research plan addressing the issue of microfinancing institutions in Uganda and the importance of internal audit to ensure high quality. 

The Research

The Ugandan financial sector comprises non-deposit-taking microfinance institutions and deposit-taking institutions (BoU Annual Report, 2021). Microfinance institutions provide financial assistance to the underprivileged worldwide to finance their small businesses (Sekabira, 2013). According to Ssekiziyivu et al. (2018), microfinance institutions in Uganda are essential in providing loans to support small and medium-sized firms that employ a large portion of the country’s workforce. Most microfinance institutions are non- deposit-taking microfinance institutions which lend to the majority of the small and medium-sized firms that contribute 20% of the gross domestic product and employ more than 60% of the labour force (Titilayo & Promise, 2022; Bouazza et al., 2015).

Sekabira (2013) reports that Tier 4 microfinance institutions lose 25% of clients annually due to poor governance oversight. Since they lend to most of Uganda’s economically active population (77.4%), Aliija and Muhangi (2017) and Agasha et al. (2020) warn that these governance oversight issues could put the financial industry and economy at risk. Ssekiziyivu et al. (2018) and Kaawaase et al. (2021) contend that research has yet to examine the importance of internal audit in the governance of regulated Tier 4 microfinance institutions.

The contemplated research examines the above through a multi-disciplinary focus on internal audit, corporate governance, and microfinance theories. The research will investigate the role of internal audit on the governance of regulated Tier 4 MFIs in Uganda. The research will attempt to construct a new development framework that may inform recommendations to institutionalize internal audit among regulated Tier 4 MFIs in Uganda.

The Researcher

Ms. Dorothy Kiyaga Nseka is a Doctor of Business Administration Candidate. She holds a M.Sc. in Finance & Accounting and a Diploma in Business Studies from Makarere University in Kampala. She is also a Certified Public Accountant of Kenya. Professionally, she holds the position of Chief Audit Executive at the Housing Finance Bank Ltd. She is a Member of the Audit Committee on Local Government for the Eastern B Region under the Ministry of Finance, Planning and Economic Development. She is also a Member of the Audit Committee for Makarere University. She sits as a Council Member at the Institute of Corporate Governance of Uganda and is an Expert on the Audit Committee for the Insurance Regulatory Authority of Uganda. She is also currently serving as Treasurer at the Institute of Internal Auditors of Uganda. She is also certified in Risk Management with ISO 31000 and has completed the CEO Apprenticeship Programme, the Executive Leadership Programme and the Senior Managers Leadership Development programme with Strathmore Business School Uganda.